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Abstract
The current study investigates empirically the relationship between the net working capital and the profitability of the industrial companies for the period of 9 years from 2009-2017.
 
 To fulfill this aim, the researcher used the analytical descriptive method on a sample consisted of 26 industrial companies listed in Amman Stock Exchange (ASE). The empirical result shows that net operating income and return on asset have positive relationship with net working capital. However, there is no relationship between net working capital and profit margin. The study recommends that to more attention for investing the net working capital by determining investment opportunities that reflect positively on profitability. Additionally, managers should raise the awareness of their employees regarding the importance of internal and external investment to increase the market share.
Highlights
The way of gaining and investing money appropriately and efficiently is regarded as one of the management priorities; this can be achieved through the ability of company to manage their assets, requirements and owners' equity
“Working capital may be referred to as net working capital generally means: current assets less current liabilities, where the concept of which appears in the statement of financial position / Balance Sheet is characterized by its fast turnover and its ease to convert it into liquid cash and current liabilities that matures and due for payment within a year or less. (Kaddumi and Ramadan, 2012)
Based on the result of Durbin-Watson test (2.006), the study reveals that there is no autocorrelations between the errors in regression equation which leads to accept the null sub-hypothesis (H0-2) that states there is no relationship between the net working capital and profitability measured by the profit margin since the calculated value of T-test is (- 0.311) is less than the tabulated value of T-test (1.960)
Summary
The way of gaining and investing money appropriately and efficiently is regarded as one of the management priorities; this can be achieved through the ability of company to manage their assets, requirements and owners' equity This means an effective system of planning and controlling is needed to decide the expected financial requirements which, by its turn, will be reflected in achieving the basic goal of the companies; namely the profitability (Jiricek and Dostalova 2010; Lee and Lee, 2006). The financial management has to achieve a list of tasks in order to increase the future income and decrease the expected risk-rate (Subramanyam and Wild, 2009; Jiricek and Dostalova, 2010) These tasks are: A- Achieving a growth in equity, profits and owners' returns. D- Deciding on the distribution or re-investment of profits
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